The government collects revenues of Rs 617 per handset by way of various duties and taxes at an average selling price of Rs 5,138, which is 24 times the incentive allocated per handset, said Cyber Media Research

The government also said it will not scrutinise anyone filing tax for the first time, which will induce more people to log on to tax-filing platforms, according to fintech startups in the space such as ClearTax and Hello Tax

Even though the Budget 2017 gave a lot of importance to boosting the digital economy, the technology companies and startups were a tad disappointed since several of their recommendations were left out.

In what could prove to be taxing for startups gearing for an IPO and their employees, Finance Minister Arun Jaitley has proposed an amendment to rules governing tax exemptions for long-term capital gains.

The government, keen on promoting digital payments, will form a separate regulator for the payments industry to resolve disputes, ensure customer protection and check any foul play by dominant players.

With announcements anchored around two radical domestic policy actions - GST and demonetisation - becoming the focal point of Budget 2017, initial reactions point to a largely positive trend towards greater adoption of these initiatives for the sector.